Make money at home

5 March 2015

Home selling has shaken off its fusty 1950s image of women gathered around tea, cakes and Tupperware. These days, dozens of companies are shouting about flexible working hours, keen to sign you up to sell anything from high-end jewellery to children's books from home.

But if you're tempted, be wary. Potential pitfalls include costs eating into your profit and struggling to shift expensive products.

Your first customers are likely to be friends and family but it takes dedication and tenacity to find a stream of buyers. Are you prepared to give the hard sell to tempt people to buy, for example, a statement necklace costing hundreds of pounds?

Despite the drawbacks, there are currently around 400,000 people in the UK employed in direct selling, as it's officially known, according to trade body the Direct Selling Association (DSA). There isn't an average overall income on offer from the DSA but you could make anything from around £50 to £1,000 or more a month, depending on how much you put into the business.

You can choose to sign up to one of 50 or so companies, ranging from the biggest and best-known cosmetics seller, Avon, to lingerie firm Soft Paris, among many others.

Upfront fees and commission structures vary depending on the company. Start-up costs shouldn't break the bank, amounting to between £100 and £200, which often includes leaflets and any training, along with some demonstration products.

Usually, the company will give the seller credits to buy some sample products as part of the set-up package. For every product sold, you earn commission of between 20% and 30%.

However, sums vary so check the fine print carefully. For example, it costs £38 to join Usborne Books at Home. Sellers receive a starter kit containing a selected range of bestsellers, and popular seasonal titles, including business stationery. You get 24% of every book sold. This appeals to mums selling through toddler groups, home parties, fairs and at school, or simply using the discounts to provide their children with their own small library.

Alternatively, The Pampered Chef is pricier. It offers two starter kits, one at £70 and the other at £125. Which you go for depends on how many sample products you want, ranging from food choppers to saucepans. You are given recipes to demonstrate using the provided products and earn 20% commission on sales.

"You can earn more products through promotions but you need to qualify for these and this usually depends on two 'shows' where you've made at least £150 at each," says a spokesperson. Its most popular seller is the food chopper at £35.50 but the price range goes up to £330 for a set of four saucepans.

As with any business, the more you sell the larger the profit. If you struggle, you could miss out on free ranges of goodies used to incentivise sellers, depending on the brand you work for. However, be wary of forking out large sums for products to boost your selling power. This risks leaving you out of pocket if you fail to shift your stock, particularly if you've picked a direct-selling venture at the more expensive end of the market.

Part-time income

The DSA is keen to promote the benefits of direct selling as a route to part-time income, or even a booming business. However, the reality could be very different. Forums on sites such as Mumsnet and Netmums debate the financial benefits for mums seeking work from home to avoid commuting and childcare costs. Around 82% of direct sellers work part-time.

One commenter expresses a major downside: "I always wonder how people keep those type of things going long-term. I mean you can probably annoy your friends into throwing parties once or twice but what then? And people only really buy stuff out of politeness. I dread getting invited to those sort of things."

Another who signed up to sell gift cards as a direct seller says: "I managed to sell some but ended up putting in too much effort to make it worthwhile, so didn't continue." If you're determined to make your venture a success, there are plenty of positive stories.

Claire Robinson, 38, from Chorley, Lancashire, lives with her husband Richard, 38, a solicitor and their three sons: Archie, seven, Bertie, four, and Sebastian, three.

"I was teaching at a law school when I had my first child, as I'm also trained as a solicitor, but got the idea to sign up as a stylist with Stella & Dot after going to a party. I'd always fancied having my own business, and this is a flexible option, meaning
I could do every school drop and pick- up," she says.

Another direct seller with the company gave her training. "You are allocated a mentor," she says. The upfront cost is £169 for brochures and customer order forms, among other bits and pieces, with commission set at a minimum of £25 per sale. "You get a £300 credit to buy your first samples." The only ongoing costs, she says, are maintaining her own website, at £10 a month after getting the first 60 days free.

Claire's been selling Stella & Dot jewellery for two years. In month one she made £280 from hosting parties as a seller, which has risen to at least £1,500 each month.

As with most direct-selling ventures, big financial rewards tend to come to those who build up a network of sales people as a team. Alongside commission from their sales, a leader also takes commission from those they have recruited. "You get out what you put into it, and the hardest part was getting my head around starting my own business," says Claire.

Megan Brewster, 26, from Syston, Leicestershire, has been working as a direct seller for Neal's Yard Remedies Organic since January 2014. She makes it work by selling products alongside her business as a beauty therapist.

"This way, I'm able to sell to clients and it's easier to build up regular customers," she says. "I've worked in direct selling since I was 19 for other companies that have ceased trading before starting at Neal's Yard."

Fees to join are £95 and you get £200 worth of products, business tools and stationery included in the cost. "I also have a free replica website as part of the deal, and in terms of commission I get 25% of each sale." Megan also holds events and pamper parties to boost sales.

"I manage to make between £1,000 and £2,000 a month from direct selling. I use the products at work and have built up quite a large team, getting a percentage of their sales too.

"You're incentivised to introduce people to Neal's Yard to become consultants, as you get a bonus depending on what the team sells."

She adds that she gets a 25% discount on any products that are ordered. "However, I rarely buy them as there are often promotions to get them free," she says.

The biggest stumbling block was gaining enough confidence to do sales pitches at parties. "Then again, it's helped me personally in this respect, as I was quite a shy person."

Of course, direct sellers aren't all women. Around a quarter of those involved are men. The over-50s account for 29% of direct sellers, either to supplement an existing income or to replace a salary lost through redundancy, for example.

"Alongside growth in these groups, we've seen a lot more people working over 30 hours a week," says Lynda Mills, director general of the DSA. She adds that direct-selling opportunities in the health and wellbeing sector are growing the quickest, and encouraging new sellers. "Companies such as Herbalife, Forever Living and Amway are attracting men and younger people in their twenties," says Mills.

Anyone can do it

You don't need any qualifications to become a direct seller. Although a passion for the product will be a great help. "Always choose one you can relate to and feel confident to go out and sell, and the company will provide training and guidance to help," says Mills.

Ensure the company you pick is a member of the DSA. This means it agrees to abide by a code of practice approved by the Office of Fair trading, with fair and honest promotion of opportunities.

"Be wary of companies that say you can earn lots of money in a short time. Companies signed up to the DSA are legally obliged not to use any wealth statements, or ask consideration sums to start a business," says Mills. There is also a 14-day cooling-off period for sellers signing up, as well as customers buying any goods.

Around 35% of direct selling is done at parties. This side of the market has more than doubled from 14% five years ago, according to the DSA. However, 'social selling' is growing in popularity, with those signing up in search of extra income turning to Facebook and Twitter to rack up sales.

Finally, if you do decide to become a seller don't forget you'll need to file a tax return each year to pay income tax on any self-employed earnings."

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